Most drivers, if not all, have insurance for their motor vehicle(s) (i.e., cars, trucks, motorcycles, etc.). Many states now mandate that vehicle insurance be purchased and maintained by the vehicle owner. Leasing companies also often require that insurance be maintained on a leased vehicle.
Insurance companies traditionally obtain background information from the driver and about the driver's vehicle through interviews and applications. The background information is compared to information databases that may include actuarial statistics. From the comparison, a total cost is determined and the driver is charged for the vehicle insurance accordingly. It should be appreciated that unless additional information is reported to the insurance company, for example, accidents or other driver information, no further data may be used to revise the cost of the automobile insurance. Because the insurance company uses little to no new data, for revising the cost of a driver's insurance policy, the cost of the policy may become incommensurate with the actual risk presented by a given driver/vehicle combination, and the cost to underwrite that risk.
The conventional way of charging for vehicle insurance, as noted above, presents very little opportunity for the driver to change his or her driving habits to otherwise affect the cost of the vehicle insurance. While avoiding accidents remains a traditional way to keep the cost of insurance low, accidents are only one input in determining the cost of the vehicle insurance. Notwithstanding, some drivers' activity or lack thereof may not be adequately accounted for when establishing the cost for the vehicle insurance policy. Some aforementioned driver activity may include taking advantage of city mass transportation systems, and otherwise leaving the vehicle parked or garaged for the majority of the day. Other activity may include driving through high risk areas where accidents are more likely to occur in given intersections or where theft may be more prevalent. As a consequence, one driver may be undercharged while another driver may be overcharged for the risk experienced by the driver/vehicle and the cost to underwrite that risk. It is desirable to provide a method of charging for automobile insurance that is more accurate and more efficient than the conventional methods. It is additionally desirable to provide a method for charging for vehicle insurance that takes into account how, when, and where the vehicle is driven to better gauge the actual risk presented to a driver/vehicle and the cost to underwrite that risk.
Knowledge of the exact whereabouts of the vehicle at a given time allows the insurance company to derive more accurately the costs based on that location information. Consumers, however, are wary of transmitting the exact location of their vehicle on a real-time basis to, among other things, an insurance company. It is desirable to obtain location information to better determine the cost of the vehicle insurance, but otherwise restrict access to the location information and add to the privacy of the operator of the vehicle.